Tuesday 20 November 2012 12.27 EST
First published on Tuesday 20 November 2012 12.27 EST

Sir John Bond is to step down as chairman of the £50bn natural resources giant Glencore Xstrata almost as soon as it is created after shareholders finally approved a £50bn takeover of Xstrata by Glencore but rejected "egregious" £140m retention bonuses.

The City grandee and current chairman of Xstrata had been slated to lead the board of the enlarged group but ended up irking his own investors, first by attempting to persuade them to accept Glencore's initial approach at what was seen as a low price, and then by proposing enhanced terms for the miner's top managers after one major shareholder forced Glencore into increasing its offer.

Xstrata's extraordinary general meeting in Zug, Switzerland, approved the takeover.

Afterwards, Bond said in a statement: "In the light of shareholders' decision not to support the board's recommendation, I have informed the Xstrata board and Glencore's current chairman that, once the merger has completed, I intend to instruct the board to commence an orderly process to appoint a new independent chairman of Glencore Xstrata. Upon the satisfactory conclusion of the search process, overseen by the Glencore Xstrata board nominations committee, I will step down."

While the timing of Bond's announcement was a surprise, most observers had been expecting him to be ousted shortly after the takeover was completed and it was clear from Tuesday's votes that many shareholders had been upset by the way the whole process had been handled.

David Trenchard, vice chairman of Knight Vinke, a top 20 shareholder which voted against all Xstrata proposals, called the planned £140m of bonuses for Xstrata bosses "egregious" and indicated Knight Vinke would be spearheading a campaign to ensure shareholders were represented more effectively by the new board.

He told the meeting: "We have no confidence in the independence and robustness of the current Xstrata board. Good governance must now take centre stage. We intend to broaden our discussion with fellow shareholders to ensure that happens."

Following Bond's announcement, Trenchard added: "This is the first step of what needed to be done. It is good news.

"The important thing is that the board appoints a sufficiently robust chairman to represent shareholders with what is clearly a strong presence of Glencore on the board."

In a series of complex votes, investors defeated a plan to increase incentives for Xstrata executives, with 32.15% of voted shares failing to back a proposal that needed 75% of votes in support. A second resolution asking investors to back a takeover without the pay scheme won 78.88% of votes, limping past the 75% threshold for the deal to be approved.

One Xstrata adviser said: "I'm surprised how high the 'no' vote was [on the second resolution]. Everyone knew last week [when Qatar Holding said it would back the deal but not the incentive scheme] you had to vote for the second resolution if you wanted the deal to go through."

The tie-up was approved by 90.08% of shareholders who voted at the EGM. After receiving the news, Bond told the meeting that the takeover had "received shareholder approval".

The deal will create a mining and commodity trading business with a combined market capitalisation of £50bn. It has taken nine months to get this far, after Glencore chief executive Ivan Glasenberg was forced into a U-turn over price by Qatar Holding, which had built a blocking stake. The impasse was only resolved after former prime minister Tony Blair intervened.

The merger of the miner and the commodity trader now faces regulatory hurdles, including a decision later this week by EU competition officials over whether to open an in-depth investigation.

Earlier in the day, Glencore shareholders had voted overwhelmingly in favour of the long-awaited takeover. As expected, a huge majority of investors supported the tie-up, with 99.4% of those who voted backing the resolution.